John Hussman has found that [Nonfinancial Market Cap / Gross Value Added] tends to be the best correlated with subsequent 12-year returns.
I don't pretend to fully understand the metric; but his recent charts (https://www.hussmanfunds.com/comment/mc251028/) are scary, and a big part of the reason why I'm mostly in cash.
I'm not a believer in short-term market timing, or in long-term valuation timing when valuations are within, say, 1 std dev of the average. But when things get as extreme as they are now, the investment thesis for holding US stocks over the long term can only be "This time is different." And that rarely works out well.
I don't pretend to fully understand the metric; but his recent charts (https://www.hussmanfunds.com/comment/mc251028/) are scary, and a big part of the reason why I'm mostly in cash.
I'm not a believer in short-term market timing, or in long-term valuation timing when valuations are within, say, 1 std dev of the average. But when things get as extreme as they are now, the investment thesis for holding US stocks over the long term can only be "This time is different." And that rarely works out well.
Statistics: Posted by venkman — Fri Oct 31, 2025 10:12 pm — Replies 4 — Views 420